The Role of Sukuk as an Inclusive Financial Instrument for Poverty Alleviation in Malaysia: Challenges and Opportunities

Despite the country’s advancement, financial exclusion continues to affect disadvantaged communities, with poverty rates remaining a significant concern, particularly in rural areas. As a Shariah-compliant financial instrument, Sukuk offers an alternative approach to mobilizing funds for socio-economic development. However, there is limited evidence of Sukuk’s effectiveness in reducing poverty, and challenges such as regulatory constraints and fragmented frameworks hinder its broader implementation. Therefore, this study aims to examine the role of Sukuk as an inclusive financial instrument for poverty alleviation in Malaysia. The data are collected from secondary data sources, including policy documents, regulatory frameworks, academic publications, and reports from financial access for low-income groups and its potential to reduce poverty. The study contributes to the literature on optimizing Sukuk as a tool for achieving sustainable development goals and fostering inclusive economic growth.